It is fantastic LL times in our area. Available rentals are very limited. Rental prices have increased... Alot. We have been hands on do it all ourselves LL's 10 years now. We have never raised rent on a tenant only at turnover. And have been shocked at how low our rents must be increasing 50- 250 with absolutely no problem filling vacant homes.

But I now understand why we should do regular and consistent increases we have some tenants that have been with us for 8 years.

Their rent could be 250-300 below our current market. I have spent much time setting up a rent increase system and forms recreating the forms in attempt to make our tenants feel appreciated and respected but then I'm raising rent ? I have filled out the forms had them ready to mail and tore them up only to convince myself again this is our hard earned asset justify the increase to myself then redo the forms and not mail them. All increases are currently completed an waiting to be mailed. We have worked extremely hard to build this biz living on job sites in a camper rehabbing for quite a few years. Putting our all into this biz. Property management has been a challenge for my character... I do not want to cause anyone hardship by rent increases but I also do not want to cheat us. Please help me to decide what is fair for all involved here.

Raise the rent to the top of your market. Raise it all at once. No need to justify, explain, apologize, or tell tenant about how hard you have worked.

Raise the rent. It is a business, and one day you will need to lower your rent.

You should have trained your tenants to accept each year a small rental increase. Now after so many years the tenants will think you are out for their blood and rebel or move out.

There are several ways to handle this situation. First you do not send everyone a rent increase at the same time other wise you may find your property empty..

Each time I've purchased a property with existing tenants that never had a rent increase, I've had to deal with this with "white gloves", an expression.

I first choose the tenants I don't like, had issues, pay the lowest rent and I don't mid if they move. I write them an advanced letter stating that my "Cost" have gone up over the years and I can no long operate with under market rents. Raise the rent to somewhere between the current rent amount and market rents. Give them like a 30 day notice.

Then after the 30 days if they do not pay the new rent on time, as stated in your letter, accept the rent they pay and give them a 3 day notice for the balance. Then have them pay the balance or evict them.

Thanks to everyone for all the great advice it's so appreciated. I decided to take the big step I have mailed 50 % of our properties rent increase notices some being as much as 10% and up increases. Maybe alot but still under market price and they have saved with the lower rent for quite awhile now I have surely gotten the lesson of how important it is to do small increases on a consistent basis that would be much easier on me and them. I will let u all know the results increase verification and lease renewals are due back to us by June 6 increased rent price begins July 6.

Hey Patty soul sister ? Does this mean u struggle with the authority of being a landlady also ?

It's a balance right?

I have to treat all people with respect and fairness to be ok with myself its just the right thing to do.

But I also have to have a backbone and follow thru with policies and rules that keep our homes in decent condition guard us from the users and abusers and evict the ones that don't pay or play by the rules...

and keep the business cash flowing.

Hopefully the next rent increase will be easier for me .

Hey Patty soul sister ? Does this mean u struggle with the authority of being a landlady also ?

It's a balance right?

I have to treat all people with respect and fairness to be ok with myself its just the right thing to do.

But I also have to have a backbone and follow thru with policies and rules that keep our homes in decent condition guard us from the users and abusers and evict the ones that don't pay or play by the rules...

and keep the business cash flowing.

Hopefully the next rent increase will be easier for me .

Wow, if you had 20 units $250 below market that's $60,000 a year in lost income :0

Whoa Bit your response is loud and clear.

I get it now for sure !!!!

Gosh why haven't I done that math !!!! And I thought I was doing good with this LL biz just keeping up and not getting walked on ... As much

Not all our homes are that low under market ...

this is such a fantastic biz lesson for me even tho I knew I should be raising rents I avoided it. I need to step up and handle what's uncomfortable at the time. I have my rent increase and lease renewal system set up now so it will be easy to do. And I'm doing it for sure!!!

Thanks everyone !

Cindy. I was a pretty green landlord back in 2010 when I started to buy properties at a pretty good pace. I now own 10 small older buildings totaling about 50 units. I manage and maintain most of them myself with the help of some good tradesman and part time assistant. I take extremely good care of my buildings, and the good tenants.

One of the best things I learned from Jeff was that raising the rents every year was a necessity, not a luxury. Ss part of my move in speech they are told that rents do go up a little each year. That helps prepare them.

I raise rents on the anniversary of move-in by 2%-5% depending on market conditions and how good a tenant they are. Staggering the rents helps to control vacancies and complaint levels. I get a few but these are usually from the people that I would not care if they moved. Raising the rents every year instead of every 3 or 4 years also helps the tenants budget.

Last year I purchased a building where the rents were WAY under market value. I did a little work on the building and then raised everyone rent by at least 15%. It was still a good deal for them. I only had one tenant leave and I rented the apartment within two weeks at far more than I would have been getting.

It is one of the BEST things that I have done. Now if I can only get myself to file faster evictions. But I am getting there too.

years ago an old horse in the LL trade told me that he raised the rent yearly by the amount that he thought that the particular tenant spent on a decent restaurant meal. if the tenant was a Charthouse type...they got an $80 tag. a chili's type...$40. for the burger king type...not sure how that would shake out. the theory was that no one would move for the amount as it was not that great a burden and avoid a move-out.

in california i try to stay up on rents and have gone from the effort to be a good deal to not caring if my rent was the highest. my homes are well cared for and that takes money. those that want to pay less are welcome to seek other lodging.

taxes go up every year, insurance often does, my time gets more valuable every year and so the rents go up.

I just sent this to my tenants. What do you think?

Hi Guys,

The bad news: Expenses, property taxes, and property insurance keep rising so I need to raise the rent by 5% when your lease renews for the next year (new rent will be $1087 + $50 = $1137). You have had two years without any rent raise since you are good tenants so this is the same as only 2.5% per year. I don't expect we will need another raise next year.

The good news: The additional $50 each month will be put into a "house cleaning, improvement and redecoration savings account" held by me ("House Account") for you to spend for those house items. Just send me a receipt for any money you spend on house cleaning, improvement and redecoration for your home and I will reimburse you the cost and subtract it from your "House Account".

So you will have $600 per year to spend on house cleaning, improvements and redecoration of your home to keep it beautiful. This does not include appliance replacement or repairs. Any balance will roll over to the next year. If you leave with a balance in the "House Account" then you will loose it.

For example, if you want to buy some paint (neutral colors please) and brushes to redecorate and it costs $45 then just send me the receipt and I will reimburse you from your "House Account" if your balance exceeds $45. If you want to have your carpets cleaned and it costs $130 then send me the receipt and I will reimburse you when your "House Account" balance exceeds $130.

What do you think of this? I'm not sure how this will work - but let's give it a try starting when your lease renews.

We are in a pretty strong market.

I wrote my lease to have an automatic renewal with an automatic rent increase of

____ 12%

__X_15%

____18%

Automatic rent increase.

No one has EVER made a comment on it.

THEN, when the anniversary comes around, i send them a note that says:

"We are very glad to have you as our client, and hope you want to continue to stay with us. What i would like to do is talk to you about whether you want to stay, and if you do, arrange the renewal.

The Lease states an automatic increase in the rent rate of 15%. We will reduce that rate for you if you renew. So let me know if that's what you want to do."

You won't believe how many people are grateful i got them just a 7% increase.

Every year.

if they a super tenants, i will do less.

And some are gonna move anyway.

PS. Tenant turnover is very expensive and very time consuming. Zero increase for a year or 2 is a very positive outcome.

Timid landlords raise skinny kids.

Renters expect increases.

Rip the bandaid off- just raise the rent to current levels without the backpeddling.

Speak with confidence that costs have increased.

Fear of offending have cost your family THOUSAND$$$!

LLs falsely think they are buying loyalty or friendship. Then wonder why the res did not cooperate at move out.

We treat everyone with respect but MY family comes first with income. The purpose of rentals is to provide income, not be a charity.

Fair but firm.

BRAD

To Warren 631

While I understand the words of your letter to tenants, I would not let my residents do anything to repair, paint, or to do anything else in my rentals because there is such a liability issue. If they paint your unit and happen to fall off of a ladder, you could be liable. If they do a repair, or get a "handyman" to fix something and something goes wrong you may end up repairing the item later on.

I will check the work is being done. If I think I'm being scammed then I'll just cancel this trial for that tenant. I just want to give the tenants some ownership and pride in their home without much cost to me. I'm not being generous - they are now paying (and providing free labor) to clean and redecorate MY property. I would have to spend this money (plus labor) to have the redecoration and cleaning done anyway. So their work might not be perfect - but THEY are happy with it.